The Australian parliament on Tuesday approved the crucial India-Australia free trade agreement (FTA), paving way for both countries to implement the trade pact on a mutually agreed date. The India-Australia Economic Cooperation and Trade Agreement (ECTA) is the first trade agreement of India with a developed country after more than a decade.
Australian Prime Minister Anthony Albanese, in a tweet, informed regarding the passing of the FTA by the Australian Parliament. "BREAKING: Our Free Trade Agreement with India has passed through parliament," he said.
Union commerce minister Piyush Goyal reacted to the development, saying it sets the stage for both countries to unleash the full potential of trade ties and spur massive economic growth. "Trading With Trust. Delighted that India-Australia Economic Cooperation & Trade Agreement has been passed by Australian Parliament."
Before both countries implement the AI-ECTA, it has to go through the Australianment parliament and must receive the cabinet's approval in India.
The approval by the Australian parliament comes after the Joint Standing Committee on Treaties of Australia last week urged the Australian government to consider the trade pact. The parliament of Australia, meanwhile, has also approved the FTA with the United Kingdom.
As part of the next step, both nations will now implement the trade deal after announcing a formal date to fully implement it. The India-Australia agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two countries. It covers areas like trade in goods, rules of origin, trade in services, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, dispute settlement, movement of natural persons, telecom, customs procedures, and pharmaceutical products.
The trade deal covers almost all the tariff lines dealt in by India and Australia. Once it'll be signed, India will benefit from preferential market access provided by Australia on 100% of its tariff lines. This includes all the labour-intensive sectors of export interest to India such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and automobiles. India will also offer preferential access to Australia on over 70% of its tariff lines.
Apart from Australia, India has signed 13 regional trade agreements with various countries -- Japan, South Korea, ASEAN countries and the countries of the South Asian Association for Regional Cooperation (SAARC) i.e. Mauritius and the United Arab Emirates. India’s merchandise exports to all these countries have registered a growth in the last 10 years. In addition, India has also signed 6 Preferential Trade Agreements (PTAs), including Asia Pacific Trade Agreement (APTA).
Notably, India and the UK are also negotiating an FTA that is likely to be closed by March 2023. There are 26 chapters under the agreement that includes goods, services, and investments in both countries and intellectual property Indian investment in the UK provides support to 95,000 jobs.
